Domestic Liquidity, Bank Lending Rise in October

Preliminary data showed domestic liquidity (M3) grew by 5.5 percent year-on-year to about PHP 17.7 trillion in October, maintaining the same pace as the previous month’s revised figure.

On a month-on-month seasonally adjusted basis, M3 increased marginally by 0.5 percent.

Domestic claims expanded by 9.8 percent year-on-year in October, slightly higher than the 9.6 percent recorded in the previous month.

Claims on the private sector grew by 11.5 percent in October, down from 12.5 percent (revised) in September, supported by continued bank lending to non-financial private corporations and households.

Net claims on the central government expanded by 8.0 percent in October, up from 6.6 percent in September, reflecting increased borrowings by the National Government.

Net foreign assets (NFA) in peso terms rose by 11.2 percent year-on-year in October, accelerating from 8.6 percent in September.

The Bangko Sentral ng Pilipinas’s (BSP) NFA grew by 13.8 percent, driven by an increase in gross international reserves.

However, banks’ NFA contracted, primarily due to higher bills and bonds payable.

Bank Lending Growth Slows Slightly

Preliminary data indicated that outstanding loans of universal and commercial banks (U/KBs), net of reverse repurchase (RRP) placements with the BSP, grew by 10.6 percent year-on-year in October, slightly slower than the 11.0 percent growth in September.

On a month-on-month seasonally adjusted basis, outstanding U/KB loans, net of RRPs, rose by 0.9 percent.

Outstanding loans to residents, net of RRPs, grew by 10.7 percent in October, compared to 11.3 percent in the previous month.

Loans to non-residents rose by 6.8 percent in October, rebounding from a 0.3 percent contraction in September.

Loans for production activities expanded by 9.1 percent in October, down from 9.8 percent in September, supported by sustained lending to key industries such as real estate activities (11.3 percent), wholesale and retail trade and repair of motor vehicles and motorcycles (7.2 percent), and manufacturing (8.8 percent).

Consumer loans to residents increased by 23.6 percent in October, up from 23.4 percent in September, driven primarily by higher credit card and motor vehicle loans.

Looking ahead, the BSP reiterated its commitment to ensuring that domestic liquidity and lending conditions remain aligned with its primary mandate of maintaining price and financial stability.